Dec Chgo Wheat closed 4 ¾ cents lower ($5.03), March 5 ¾ cents lower ($5.12) & July 5 cents lower ($5.30 ¼)
Dec KC Wheat closed 5 ½ cents lower ($4.81), March 5 ¼ cents lower ($5.04 ¼)) & July 6 cents lower ($5.29 ½)
Flat price wheat tries to reverse Tuesday’s losses early in the Wednesday trade – it failed miserably. The USDA “progress & condition” report Tuesday afternoon featured offsetting issues; friendly planting report vs. an improvement in conditions. KC continues to lose to Chgo – that’s not friendly. Chgo bull spreading resumed after Tuesday’s setback. Normally I would perceive that as friendly but the more I look at the rationale for the bull spreading it is due to what looks like a manufactured squeeze due to the lack of deliverable receipts. This scenario is not happening in KC so that why I say the bull spreading in Chgo is manufactured not due to demand.
Interior advertised interior wheat basis levels run unchanged. The same holds true the Gulf. Bull spreads work in Chgo for the reasons I outlined but not much happens with the KC spreads.
Closes below $5.00 Dec Chgo will not bode well for those that are trying to friendly (despite what the bull spread is trying to do). The KC market continues to inch closer to its Dec 2017 low of $4.78 ¼ and the market is not oversold. Overall the wheat markets would do well for themselves just to stand in at current levels.
Daily Support & Resistance for 11/15
Dec Chgo Wheat: $5.00 ($4.96) – $5.14
Dec KC Wheat: $4.78 (?) – $4.93
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